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New Trucking Futures and Options Exchange to Launch

Risk Desk editor John R. Sodergreen interviewed former ICE eConfirm Chief Bruce Tupper and former CFTC attorney Peter Kavounas about the prospective launch of a trucking futures and options exchange. The new exchange, TransVix, is intended to serve the risk management needs of the trucking industry.

Mr. Tupper explained that the trucking market involves a limited number of pre-set routes, or “origin-destination” pairs, with seasonality data trends resembling those of the gas pipeline network and also similar in concept to the electricity market. He stated that the trucking market has “a perishable commodity, one you can’t really store and [one that] has so many potentially precipitous impacts” that are difficult to predict and hedge against. He said that the trucking industry experiences greater price volatility than the energy markets because “shippers here can move a lot of their fleet into a market that might be overpriced at the moment, and take advantage of those rates, then bring it back down.” Mr. Tupper also predicted that there “should be a very good spot market from the beginning” and said that TransVix eventually “will offer an 18-month curve to capture a year’s worth of seasonality.”

In addition, Mr. Tupper mentioned that TransVix intends to partner “with an established clearing operation to bring these contracts to market.”